OCC challenges California climate disclosure rules for federally chartered banks

What happened

The Office of the Comptroller of the Currency (OCC) has asked the California Air Resource Board (CARB) to clarify that national banks and federal savings associations are not required to comply with two California climate disclosure laws.

In a letter submitted on 29 October, the federal banking regulator raised legal and policy objections to applying the laws to those institutions. The OCC said the disclosure requirements would conflict with its regulation and with bank safety and soundness, while imposing undue burdens, particularly on smaller banks.

The announcement sets out the OCC’s position and request for clarification. It does not report a CARB response or a decision exempting federally chartered banks.

Why it matters

The intervention concerns the boundary between state requirements and federal oversight of banks. For the institutions concerned, the issue is whether California’s climate disclosure obligations apply alongside their federal regulatory requirements.

The OCC argued that applying the laws to federally chartered banks could disrupt customer relationships and harm California customers. It also warned that doing so was likely to reduce competition, increase prices and restrict access to financial services for residents and businesses. These are the regulator’s assessments of potential consequences, rather than reported outcomes.

Context / What to watch

The OCC cited constitutional concerns, including under the Supremacy Clause. It also said application of the laws could conflict with the legal framework governing federal pre-emption and visitation, which it described as critical to the US dual banking system.

The immediate question is whether CARB will provide the clarification sought by the OCC. The release does not specify a timetable for a response.

The OCC said it would continue to monitor state-law developments nationwide and act where appropriate, framing the letter as part of its effort to prevent improper state interference with banking and access to financial services.